Cancer therapeutics deal with Bayer HealthCare could mean $540 million for Compugen

TEL AVIV, Israel—Compugen Ltd. announced Aug. 5 the signing of a collaboration and license agreementwith German pharma Bayer HealthCare for the research, development and commercialization of antibody-basedtherapeutics for cancer immunotherapy against two novel Compugen-discovered immune checkpoint regulators.

Under the terms of theagreement, Bayer and Compugen will jointly pursue apreclinical research program and, subsequent to that, Bayer will have full controlover further development and have worldwide commercialization rightsfor potential cancer therapeutics.

In the short run, this means an upfront payment to Compugenof $10 million, but the company is eligible toreceive more than $500 million in potential milestone payments for bothprograms, plus milestone payments of as much as $30 millionassociated with preclinical activities. And that potential $540 million or so payoff over the long run would also see the addition of mid to high single-digit royalties on global net sales for Compugen if either or both programs end up bringing a product to market.

"Bayeris committed to translating the science of cancer research intoeffective therapies helping people affected by cancer live longer andimprove their quality of life," said Prof. Andreas Busch, a member of theBayer HealthCare executive committee and head of global drug discovery."Antibody-based immunotherapies are promising approaches in oncologywhich can stimulate the body's own immune cells to fight cancer cells.Immunotherapy is one of our focus areas in oncology research. We arelooking forward to expanding our portfolio in this area throughpartnering with Compugen."

"We are very excited to initiate thiscollaboration with Bayer, a leading global life science company with abroadening oncology franchise, for the development of antibody-basedcancer immunotherapies against these two promising novel immunecheckpoint targets," added Dr. Anat Cohen-Dayag, presidentand CEO of Compugen. "In addition, we believe that the prediction andvalidation of these two targets, through the use of our broadlyapplicable predictive discovery infrastructure, provides additionalvalidation for our long-term commitment to establishing this uniquecapability".

The immunotherapy approach aims at combattingcancer by stimulating the body's own immune cells. The tumor and itsenvironment suppress the ability of cancer patients to develop aneffective anti-tumor immune response and in this way protect both tumorgrowth and survival. Compugen has discovered two novel immune checkpointregulators that potentially play a key role in immunosuppression.Researchers at Compugen are developing specific therapeutic antibodiesthat are geared to block the immunosuppressive function of these targetsand to reactivate the patient's anti-tumor immune response in order tofight cancer.